BANCOINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of Banco Products (India) Ltd (BANCOINDIA.NS) is 16.2%.

The Cost of Equity of Banco Products (India) Ltd (BANCOINDIA.NS) is 16.65%.

The Cost of Debt of Banco Products (India) Ltd (BANCOINDIA.NS) is 10.90%.

	Range	Selected
Cost of equity	15.20% - 18.10%	16.65%
Tax rate	24.80% - 27.60%	26.20%
Cost of debt	7.50% - 14.30%	10.90%
WACC	14.7% - 17.7%	16.2%

WACC

BANCOINDIA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.20%	18.10%

Tax rate	24.80%	27.60%
Debt/Equity ratio	0.05	0.05
Cost of debt	7.50%	14.30%

After-tax WACC	14.7%	17.7%


Selected WACC	16.2%

BANCOINDIA.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for BANCOINDIA.NS:

cost_of_equity (16.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.